Rush Street Interactive(RSI) - 2026 FY - Earnings Call Transcript

Financial Data and Key Metrics Changes - For 2025, the company expects revenue to be a little over $1.1 billion and Adjusted EBITDA to be $150 million, with solid growth anticipated for 2026 [4] - Monthly active users in North America increased by 34% in Q3, with a notable 46% increase in markets with online casino offerings [8][9] - The cost to acquire players has decreased, contributing to record numbers of first-time depositors in Q2 and Q3 [6][8] Business Line Data and Key Metrics Changes - The revenue mix is approximately 70% from online casino and 30% from online sports [3] - The company has seen significant growth in player count and gross gaming revenue in Colombia, despite previous tax headwinds [18][19] - In Mexico, the company experienced over 100% year-over-year growth, benefiting from the shutdown of competitors [25] Market Data and Key Metrics Changes - North America accounts for about 85% of the company's operations, with 15% in Latin America [3] - In Michigan, the market revenue increased by 18%, while the company's revenue surged by 50% [5] - The company reported strong growth in New Jersey and Ontario, with increases of around 20% [10] Company Strategy and Development Direction - The company focuses on a customer-centric approach, prioritizing online casino over sports betting, which is seen as a long-term growth opportunity as more states legalize online casino [3][4] - The company is exploring new market opportunities, including Alberta and Maine, which have recently legalized online casino [11][12] - The competitive landscape is evolving with the introduction of prediction markets, but the company views it as more of a distraction than a direct threat [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the product and technology, which have contributed to attracting and retaining customers [6][34] - The company anticipates continued growth in existing markets, with all online casino markets growing more than 20% annually [14] - The management is optimistic about the potential for new legislation in states like Virginia, New York, and Illinois, which could provide significant opportunities [13] Other Important Information - The company has successfully navigated regulatory challenges in Colombia, with a new tax structure expected to be more favorable for profitability [20][21] - The company has a unique technology approach that enhances user experience, leading to higher average revenue per user compared to competitors [34] Q&A Session Summary Question: How many states do you have licenses in, and how many states provide licenses at this point in time? - The company holds licenses in all competitive states except Connecticut and Rhode Island, with operations in Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia [35] Question: When you open up a new state, how long does it take to break even? - The company has been profitable in the fourth quarter of operation in every online casino market launched in North America, typically recovering investments within six quarters [40]